Question

In: Economics

Consider the following five utility functions. G(x,y) = -1 / [ min(6x,2y)+1] H(x,y) = min(6x,6y)2 L(x,y)...

Consider the following five utility functions.

G(x,y) = -1 / [ min(6x,2y)+1]

H(x,y) = min(6x,6y)²

L(x,y) = min(6x,2y) - 10000000000

U(x,y) = min(3x, y)³

W(x,y) = min (6x, y)² + 2

Z(x,y) = min (x,2y)

Which of the above functions, if any, is homogeneous of degree 2?

a. L

b.W

c.Z

d.None.

e.H

f.G

g.U

Expert Solution

H(x,y) = min(6x,6y)²

Augment the production function with factor

H(x, y) = min(6x, 6y)^2

H(x, y) = ^2*H(x,y)

So, this production function is homogenous of degree 2.

Option e. is correct

Rahul Sunny answered 2 years ago

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